CHAPTER TWO THE INTERNAL REVENUE CODE. EXPECTED LEARNING OUTCOMES l Appreciate and understand: The...
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Transcript of CHAPTER TWO THE INTERNAL REVENUE CODE. EXPECTED LEARNING OUTCOMES l Appreciate and understand: The...
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CHAPTER TWO
THE INTERNAL REVENUE CODE
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EXPECTED LEARNING OUTCOMES
Appreciate and understand:• The significance of the Internal
Revenue Code • The legislative process• How to find legislative history• How to locate and analyze Code
provisions• How to properly cite the Code
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Sources of tax law
Sixteenth Amendment ratified in 1913 created income tax.
Internal Revenue Code was created in 1939 and subsequently revised in 1954 and 1986.
Statutory authority = Internal Revenue Code (Legislative)
Administrative authority (Executive) Judicial authority (Judicial)
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THE SIGNIFICANCE OF THE INTERNAL REVENUE CODE
Compilation of tax statutes enacted by Congress
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THE LEGISLATIVE PROCESS
P re s id e n t
B o th H o u s e s
C o n fe re n c e C o m m itte e
S e n a te
S e n a te F in a n c e C o m m itte e
H o u s e o f R e p re s e n ta tive s
H o u s e W a ys a nd M e a n s C o m m itte e
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FINDING LEGISLATIVE HISTORY
Each act is a “Public Law” and given a designated number – pg. 54
Recent public laws (CCH and RIA) Older legislation
• Cumulative Bulletins• BNA’s Primary Sources
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Joint Committee On Taxation
Created by the IRC Works with W&M committee and SFC
committee – Brings tax law knowledge to the process.
Provide explanations of the law: Blue Book
Do not confuse with conference committee in the legislative process
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ORGANIZATION OF THE CODE
Title 26 of the United States Code Organized into segments See Illustration on pg. 58 Citation of Code: Sec. #, subsection,
paragraph, subparagraph, clause: Sec 162(g) (1)(A)(i) – see pg. 62-63.
Flush language---
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LOCATING RELEVANT PROVISIONS
Table of Contents – reference noted is to Code Section
Index Knowledge of pertinent provision Reference from a secondary
source
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Analyzing the Code
Logical skimming Terms of art: special meaning when using the
IRC• Determining the tax context and relative importance
of words.• IRC Sec 7701 – useful definitions
Connecting words: or v. and to assess if criteria are met.
Measuring words: less than, equal to, greater than etc.
Use of male pronoun: used for brevity
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Analyzing the Code(Continued)
Limiting language: For purposes of a) this title v. b) this section
Pinballing: reference to other sections rather than repeat of provisions
Sunset provisions: time limitation of section, requiring future reenactment.
Transition provisions: safe harbors during pending legislation.
Historical notes: insight into previous versions of the code section.
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Accessing the Code
Print/Paper CD-ROM Modem Web